Paramount Skydance Targets $2.2 Billion in Cuts via Bundling

Paramount Skydance expects to cut at least $2.2 billion in costs by bundling redundant back-office and corporate functions, according to its third-quarter shareholder letter, part of a broader plan to reach $6 billion in run-rate synergies over three years.

The decision follows the completion of its acquisition of Warner Bros. Discovery in October. The combined company now carries roughly $80 billion in debt and is under pressure to slim down. Revenue for the quarter reached $7 billion, up 5% year over year, while net earnings came in at $73 million before the acquisition closed.

The company has launched more than 20 internal "workstreams" to identify where cuts are possible, executives said on the third-quarter earnings call on Monday.

What does the bundling strategy change for marketers?

The most direct effect sits in media planning and buying. Skydance intends to bundle media planning and buying across its business units to eliminate audience overlap, coordinate campaigns across those units and maximize media efficiency at scale.

In plain terms, the conglomerate plans to consolidate back-end and front-end operations into fewer, larger groups. The shareholder letter frames this as "bundling," and the company is applying the concept across several functions:

• Corporate operations: at least $2.2 billion in savings from bundling redundant back-office and corporate functions.
• Media: unified planning and buying across business units to remove duplicated audiences.
• Technology: a single enterprise tech stack, streaming ecosystem and broadcast architecture, merging parallel technology functions.
• Procurement: consolidated purchasing and vendor management, with the company arguing its combined purchasing levels will deliver economies of scale through one centralized buying group.

The scale target for all of this is $6 billion in run-rate synergies over the next three years.

What happens to the streaming products?

The bundle consumers will notice arrives in early 2027, when Skydance will bundle HBO Max and Paramount+. CEO David Ellison said on the earnings call that the two streaming services are complementary, and described the move as the "first step" toward a one-stop streaming service.

For advertisers, a combined HBO Max and Paramount+ inventory pool would follow the same logic as the back-office consolidation: fewer duplicated audiences, coordinated campaigns and larger reach from a single negotiation.

Sports advertising is already moving in that direction. Skydance reported a 20% year-over-year rise in sports advertising commitments for current and upcoming seasons leading into 2027.

How management frames it

Co-CEO Ynon Kreiz positioned the restructuring as an expansion play rather than a retreat. "This is a growth story; we are shifting from legacy media to building a next-generation media and entertainment company powered by creativity and technology," Kreiz said.

The numbers behind that framing remain tight. A $73 million net profit on $7 billion in revenue, before the acquisition closed, left little margin for carrying an $80 billion debt load without structural change. The $2.2 billion bundling target and the $6 billion synergy goal give the combined company its stated path.

What to watch next

The more than 20 workstreams will report their findings over the coming months and possibly years, and each one represents a potential consolidation of vendors, agencies or technology suppliers. Media buyers, ad-tech vendors and enterprise software providers currently working with separate Paramount and Warner Bros. Discovery units face the practical question of whether their contracts survive the merge into centralized purchasing.

The early-2027 HBO Max and Paramount+ bundle will be the first consumer-facing test of the strategy.